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Real Property - Adverse Possession (3). Margaritis v.Milne
In Margaritis v.Milne (Div Court, 2023) the Divisional Court considered a s.37 Conveyancing and Law of Property Act (CLPA) ['Lien on lands for improvements under mistake of title'] application to address 'improvements' accidentally performed on a neighbour's land, here a title transfer and compensation back to the original owner.
This law may have application to facts similar to adverse possession scenarios (regardless of whether they are under the Registry Act and the Land Titles Act):[3] On February 2, 2023, Dineen J. heard these applications. In careful and thorough reasons for decision, Dineen J. concluded that Mr. Milne had made lasting improvements to the strip of land in the belief that it belonged to him. [1] Justice Dineen exercised his discretion and granted title to the wedge of land to Mr. Milne pursuant to s. 37 of the Conveyancing and Law of Property Act.[2] As contemplated by s. 37 of the Act, Justice Dineen ordered that Mr. Milne compensate Mr. Margaritis for the value of the land to be retained by Mr. Milne.
[4] Mr. Margaritis appeals the order of Justice Dineen to this court as of right.[CLPA s.37(2)] At their core, his submissions invite the court to reweigh all of the evidence before the application judge and to make different findings of fact.
[5] In my view, Justice Dineen correctly interpreted s. 37 of the Act. Justice Dineen’s findings of fact, including that Mr. Milne had an honest and bona fide belief that the land was his, and that Mr. Milne made lasting improvements on the land, were reasonably open to him based on the record before him. I see no palpable and overriding error. Justice Dineen also properly exercised his discretion when considering what relief would be most just in the circumstances. Finally, I see no reason to interfere with Justice Dineen’s discretionary decision to have each party bear their own costs of the applications. I would dismiss the appeal.
Subsection 37 of the Act
[6] The relevant portions of subsection 37(1) of the Act read as follows:37 (1) Where a person makes lasting improvements on land under the belief that it is the person’s own, the person…[is] entitled or may be required to retain the land if the Superior Court of Justice is of opinion or requires that this should be done, according as may under all circumstances of the case be most just, making compensation for the land, if retained, as the court directs. [7] Before exercising the discretion to allow a person to retain land owned by another, the court must be satisfied that:a. the party must have genuinely believed that he or she owned the land;
b. the improvements must be of a lasting nature; and
c. the court must weigh the equities between the owner and the person making the improvements to determine whether it is appropriate to transfer the land to the person making the improvements.[4] [8] Justice Dineen correctly interpreted s. 37. He cited the leading cases and considered each of these three elements.
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[16] A lasting improvement is an addition to a property amounting to more than mere repair or replacement of waste. A “lasting” improvement is one that has permanence, in the sense of not being easily removable, as is the case with some fixtures.[7]
[17] Justice Dineen concluded that Mr. Milne had made lasting improvements by constructing a retaining wall, fencing, a c-channel; pouring concrete; and filling in the land by raising it four-feet to construct a parking pad. Each of these findings of fact was available to Dineen J. based on the evidentiary record before him. There is no basis upon which this court can interfere with those findings. . MacQuarrie v. Proulx
In MacQuarrie v. Proulx (Ont CA, 2023) the Court of Appeal considered adverse possession claims:[3] The respondents purchased their property on December 1, 2006. The appellant’s mother and her spouse obtained title to the appellant’s property in July, 1995, and the appellant became the sole owner in September, 2011. On February 19, 2007, all the lands came under the Land Titles system. Therefore, the claim for adverse possession had to be based on open, notorious, continuous, exclusive use without permission for a 10-year period prior to that date.
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B. Decision of the Application Judge
[8] The application judge applied the three-pronged test for determining adverse possession, the onus being on the party asserting the adverse possessory claim: Did the respondent establish: 1) actual possession of the property over a ten-year period prior to February, 2007? 2) the intention to exclude the true owner? 3) effective exclusion of the true owner?: Barbour v. Bailey, 2016 ONCA 98, 345 O.A.C. 311, at para. 35. . Billimoria v. Mistry
In Billimoria v. Mistry (Ont CA, 2022) the Court of Appeal considered an adverse possession claim over joint investment property where the claimant lived in a house for over ten years:The RPLA Issue
[31] Second, even if a limitation claim under the RPLA had been available, we see no error in the trial judge’s conclusion that the appellant had not established actual possession of the property for the requisite ten-year period under the RPLA.
[32] She correctly articulated the law in respect of adverse possession as set out by this court in Vivekanandan.
[33] She then provided comprehensive reasons for finding that the appellant had never established actual possession sufficient to dispossess the respondents. In particular, she noted that the appellant was occupying the property pursuant to a verbal agreement with the respondents. Given her finding that that the respondent co-owners permitted his occupation, the “adversity” element of adverse possession could not have been made out: Teis v. Ancaster (Town) (1997), 1997 CanLII 1688 (ON CA), 35 O.R. (3d) 216 (C.A.), at p. 221.
[34] She cited the fact that the property was an investment property, the informality of their relationship due to their friendship, the joint deposit on the property, the agreement that the appellant should live at the property rent-free in exchange for paying carrying costs with the idea that one day the property would be sold, the mortgage, insurance and tax documents which were sent to the respondents, two mortgage payments which were paid by the respondents and other ownership obligations which were assumed by the respondents.
[35] She also noted that the appellant had never told the respondents that the property was his alone. In fact, as recently as 2018, the parties jointly retained counsel to rectify the title issues to reflect the fact that they were all registered owners as tenants in common. She concluded that this evidence is inconsistent with the appellant’s intention to exclude the respondents from possession of the property.
[36] For all these reasons, the trial judge held that as a factual matter, the respondents never lost possession of the property, either by dispossession or discontinuance of possession. She held that the appellant therefore failed to meet his burden of showing that he had successfully dispossessed the respondents of their interest in the property or that the respondents had discontinued their possessory interest in the property such that their rights in the property were extinguished.
[37] We see no error in the trial judge’s conclusion that the appellant had failed to establish his claim under the RPLA. . Billimoria v. Mistry
In Billimoria v. Mistry (Ont CA, 2022) the Court of Appeal considered an adverse possession claim where the defendant claimed that adverse possession was extinguished under s.51, Land Titles Act:The Land Titles Act Issue
[23] In our view, the new issue the respondents raise on appeal, that s. 51 of the Land Titles Act bars the appellant’s claim, is properly before us and is dispositive.
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[26] The appellant claims that he is the sole owner of the property because his long physical occupation of the property dispossessed the respondents of their interest, within the meaning of s. 5 of the RPLA, and the respondents are now statute-barred pursuant to s.4 of the RPLA, from bringing an action to recover the property. He argues that reliance on the RPLA is not a claim for “adverse possession” and is not governed by the principles of adverse possession, but instead rests on a finding that the person entitled to the property has been “dispossessed” or had “discontinued … possession” more than 10 years before attempting to make entry or distress or bringing an action. He argues that the trial judge erred in applying the principles of adverse possession. He also argues that his claim falls outside of s.51 of the Land Titles Act. We do not accept the distinction the appellant is attempting to make. In essence, his claim is for adverse possession under the RPLA. Nor do we accept his argument that his claim is not caught by s. 51 of the Land Titles Act.
[27] Adverse possession is established where that claimant had actual “open, notorious, constant, continuous, [and] peaceful” possession for the statutory period of ten years in accordance with s. 4 of the RPLA, as well as an intention to exclude the true owner from possession, and effective exclusion of the true owner for the entire ten-year statutory period: Vivekanandan v. Terzian, 2020 ONCA 110, 443 D.L.R. (4th) 678, at para. 21.
[28] However, land that is registered in Land Titles cannot be obtained by adverse possession unless the ten-year exclusion period ran before the land was registered: Sipsas v. 1299781 Ontario Inc., 2017 ONCA 265, 85 R.P.R. (5th) 24, at para. 18. Section 51(1) is worded broadly and clearly embraces the claim the appellant is making. It provides, in relevant part:“Despite any provision of … the Real Property Limitations Act … no title to and no right or interest in registered lands under this Act that is adverse to or in derogation of the title of the registered owner shall be acquired hereafter or deemed to have been acquired heretofore by any length of possession or by prescription” (emphasis added). [29] In this case, the property was already registered in Land Titles at the time it was purchased by the parties, and thus, the appellant could not have obtained title to it by adverse possession. The appellant cannot make out a claim of adverse possession regardless of how long the appellant actually occupied the home.
[30] This alone is sufficient ground to dismiss the appeal.
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